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"Private Islands: A Buyer's Guide", by Nicolas Stein, Fortune Magazine, May 1, 2000.
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The image of a pristine island—azure waves lapping at the shore, palm trees silhouetted in the setting sun—is synonymous with paradise. But it wasn't always this way: Homer's Odysseus battled gargoyles and sirens while island hopping; Daniel Defoe's Robinson Crusoe was terrorized by storms and cannibals.
By the turn of the 20th century, mass travel had made many islands less remote, and the idea of owning a slice of solitude gained increasing appeal. "As a symbol of great possession," predicted Dwight Macdonald 70 years ago in the first issue of FORTUNE, "the privately owned island may yet supplant even the steamship."
It goes without saying that MacDonald was right, but he probably didn't foresee how easily attainable private islands would become. Many countries have relaxed ownership laws to entice investment; the Internet has made it infinitely easier to view what's for sale; and specialized brokers have demystified the buying process.
According to Farhad Vladi, one of the world's pre-eminent island brokers, there are only 100 to 120 "desirable" islands for sale at any given time, ranging in price from $30,000 to $30 million. A desirable island is anywhere from five to 1,000 acres in size, has an elevation of at least 15 feet, and provides a harbor and several anchorage areas. It should also have a choice of beaches so that one is always protected from the wind. And the more existing infrastructure—docks, landing ramps, roads, housing—the better.
Palm trees or spruce trees: While exotic locales continue to represent the ideal, most buyers choose to stay close to home. More than a third of the 100 or so properties in Vladi's catalog are in the coastal and lake regions of the U.S. and Canada, where there are no ownership restrictions, fresh water is plentiful, and supplies are a short boat or helicopter ride away And prices tend to be relatively low, unless the island has been lavishly developed. Apple Island, less than 50 miles from Halifax, costs $33,400; an undeveloped eight-acre island in Georgian Bay, $272,000. Something less rustic? A 34-room mansion atop rocky Hope Island, minutes from Portland, Me., is on the market for $1.47 million.
Beyond North America, the waters become choppier—and the real estate pricier. Negotiating the policies of foreign governments, developing an infrastructure, and maintaining security all require significant planning and expense. The rules vary from country to country The U.S. Virgin Islands discourage foreign buyers by charging high taxes, but a $500,000 investment in the Bahamas enables you to obtain permanent tax-free residency. Tahiti requires a significant investment in the local economy (by, say, opening a hotel), while Fiji offers handsome tax breaks. Most Asian countries limit foreigners to ownership stakes below 50%; Malaysia and the Philippines don't allow foreigners to buy islands at all. New Zealand opened its islands to foreigners only in 1994. A broker with connections among local attorneys, government officials, and builders can shepherd you through the due diligence process, conduct title searches, and ensure that any building plans will meet with approval.
Development: While some owners are content to leave their properties in the original condition, many choose–at considerable effort and expense–to replicate (or even surpass) the amenities they're accustomed to on the mainland. Bahamas developer Gerry Higgs says that among his current island projects are a 40,000 square-foot, multi-building estate for "one of the world's wealthiest tycoons" and a multi-villa development connecting two islands, with an 18-hole golf course and a marina. The plans for the latter project list 24 separate charges, for a total of $50 million. These include an environmental-impact study ($350,000, required by Bahamian law), staff and operating expenses for the first 18 months ($1.5 million), and construction of an airport ($3 million). Higgs says that building on an island can cost $200 to $300 per square foot–50% to 75% more than on the mainland–because everything from equipment to labor must be brought in on barges, and special weather and rust-resistant materials need to be used. To reduce the cost, builders often cast the project on the mainland and then transport it in prefabricated chunks. Remoteness also requires investment in infrastructure. A reverse-osmosis desalination plant will transform the surrounding sea into potable water for between $20,000 and $50,000. Another $7,000 will buy a sewage-treatment plant. Diesel-powered generators can supply electricity. Rustic islanders can get by with a $6,000 unit, but if you want air conditioners, hot-water heaters, and other household appliances, expect to pay at least $60,000.
Security: Most high-end island owners employ full-time caretakers (there's even a newsletter called Caretaker Gazette), while others pay local fishermen to keep an eye on things. Islands in the highly trafficked Caribbean are more susceptible to crime than those in out-of-the-way locations, especially if they have a trespasser-friendly airstrip.
Rent before you buy: Vladi recommends that all potential customers try island life on for size before making a purchase. In recent years he has added a rental arm to his brokerage, and now offers weekly rates from $100 to $55,000. The latter price is for what you'd expect: an island in the Bahamas with all the amenities. The former buys time on Mas-A-Tierra island, off ChileÑsince renamed Isla Robinson Crusoe. (Enough said.) For another $385, Vladi will throw in a Gucci "island survival bag," packed with, among other things, a two-person tent, a compass, a hammock, a fishing rod, a Swiss army knife, and a copy of the Daniel Defoe novel.
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